PLEASE ENSURE THIS ALERT IS COMMUNICATED TO ALL STAFF IN YOUR FIRM

On the 2nd April this year we published an article on the Lockton website entitled The Covid-19 Outbreak – A Fraudster's Dream, warning the profession that during periods of distress or upheaval fraudsters are most active.
 
We are sorry to report that, during this Covid–19 outbreak this certainly seems to be the case.
 
Property Fraud

The Law Society have recently been contacted by Glasgow CID reporting a number of property frauds perpetrated on the public and on firms of solicitors. While we don't have full detail of these matters, as investigations are ongoing, they have certain features in common:

  1. They often involve property which has been on the market for at least six months and not sold.
  2. Fraudsters have been using very convincing fake documentation e.g.  false driving licences presenting themselves as the owner of the property to unsuspecting solicitors and in some cases false title deeds.

Actions

You need to carefully check the number and details on driving licenses and indeed all ID documentation.

Ensure that your client verification processes are well established and followed in every case.  
The Law Society have published advice on non-face-to-face identification and verification –
click here to view the full update.

Glasgow CID say that there is advice online about how to recognise a genuine driving license. Make sure all your staff are aware of the details.

Payment Fraud

In addition, we are continuing to see email interception frauds (payment frauds). The most recent case involved a firm sending £900,000 to a fraudsters account. Whatever methods the fraudsters use to gain access to the email exchanges between solicitors and their clients, there is much a firm (and their clients) can do to help avoid falling victim to these scams.
  
Actions to avoid falling victim to fraudsters:

  • NEVER act on an emailed instruction to change a client's destination bank account
  • ALWAYS seek further verification of that instruction – either call the client or speak to them face to face
  • CONSIDER introducing systems and controls regarding payments to bank accounts
  • ADVISE clients that if they subsequently change their payment instructions, your firm will not make any payment until instructions have been verified by alternative means
  • KEEP discussing this issue with your staff to keep them alert to these threats  

Help prevent your client falling victim to fraudsters:

  • ALWAYS ask the client to call your office to confirm the firm's bank account details if they receive any communication which requests a payment
  • PROVIDE the details of the firm's bank account within your letter of engagement/terms of business
  • INCLUDE within your letter of engagement/terms of business, a notice to clients stating that the firm's bank account details will NOT change during a transaction; that the firm will not change bank details via email; and that clients should check details in person if in any doubt. Also include this notice as a footer to all firm emails
  • DON'T deviate from this practice – you are more likely to be held liable, at least in part, if you do what you said you wouldn't do and something goes wrong.
  • KEEP discussing this issue with your clients to ensure that they are alive to the threats and that they know what to expect from your firm. 

If you have any questions or would like to discuss anything contained in this alert then please contact your usual Lockton Account Manager.